What are SaaS Contracts and Agreements?

SaaS (software as a service) contracts are enforceable agreements between two parties prepared by software providers to state the terms of using their service. Providers processing customers’ personal data need one under GDPR Article 28. These contracts clarify responsibilities on both sides, ensure each party’s protection, and explain how the software will operate.

The important parts of a SaaS agreement are these components:

• Service Information: Covers the scope of the cloud-based software and the features included.
• Pricing and Payment Models: Outlines subscription models, payment arrangements, and policies for late payments.
• Data Security: Clearly defines who has access to user data, how it’s used and protected, and the security measures installed.
• Service Level Agreements: SLAs ensure stipulated levels of software uptime, performance, and issue resolution.
• Extent of Liability: Shows the limit to which the provider or client can be liable for damages.
• Intellectual Property: This confirms that the owner retains ownership rights of the software while the customer is granted usage rights.
• Termination and Renewal: Defines the procedure for nullifying a contract or extending the relationship.

SaaS agreements are quite different from conventional software license agreements. The former allows the user to access the software hosted on the cloud, while a license agreement lets you use the software locally or integrate it into your systems.

Example. Service is provided under a SaaS contract: Google’s Workspace SLA assures a minimum of 99.9% availability per month, with service credits for non-compliance (Google, as of October 2026).

A SaaS contract may contain components of an End User License Agreement (EULA), but SaaS contracts are quite broad and all-encompassing. EULAs focus squarely on how the software itself is used, while SaaS agreements enforce broader parameters within a provider-customer relationship.

In most SaaS partnerships, the customer reserves ownership rights to their data. However, the service provider has the right to access and use the data as stated in the contract. According to Article 28 of the GDPR, with regard to any data that the processor has to process on behalf of the customer, the contract must specify that the processor acts only upon the instructions of the customer (GDPR, Art. 28).

Some SaaS companies may use data in anonymous forms to improve data-driven decision-making.